House Republicans push bill to scrap Wall Street safeguards

For Capitol Hill watchers, there was one big story to watch yesterday: a dramatic floor vote in which the Republican majority narrowly passed a regressive and needlessly punitive health care bill. But just away from the spotlight, a smaller group of GOP officials were advancing another top priority for the party, which is likely to be as controversial.

The House Financial Services Committee voted along party lines to approve something called the Financial Choice Act, the point of which is to gut most of the Wall Street reforms created in the wake of the 2008 crash. The Dodd-Frank law, which established a series of safeguards and layers of accountability, has drawn fierce opposition from Republicans and their allied lobbyists from the financial industry, and this bill is the vehicle GOP officials have embraced to roll back the clock.

Spearheaded by House Finance Chair Rep. Jeb Hensarling (R-TX), the Choice Act begins by throwing out much of the banking oversight passed under President Obama’s administration, mostly through the Dodd-Frank act signed in 2010. But it goes further than that, rolling back oversight in a way that could dramatically exacerbate the likelihood of another financial crisis, according to experts in financial regulation. […]

[The bill also] looks to some like a wish list of what advocates and lobbyists for the banking industry have demanded. Among the provisions that have most alarmed progressives on the Hill is its proposed elimination of the “Volcker Rule,” which prevents commercial banks from making certain kinds of speculative and risky trades. The Choice Act would also gut the Consumer Financial Protection Bureau, the brainchild of Sen. Elizabeth Warren (D-MA).

Marcus Stanley, policy director for Americans for Financial Reform, told Vox, “It’s a little hard to get your mind around everything this bill does, because there’s almost no area of financial regulation it doesn’t touch. There’s a bunch of very radical stuff in this bill, and it goes way beyond repealing Dodd-Frank.”The White House, not surprisingly, has expressed support for the legislation.

The bill would be subject to a Democratic filibuster in the Senate, and it’s hard to imagine eight Senate Democrats breaking ranks to support legislation that’s even similar to the House bill. That said, there are elements of the Choice Act that Republicans believe they can pursue through the budget reconciliation process, which means Senate passage with just 51 votes.

As for the bigger picture, there were voters last year who helped elect Donald Trump and a Republican Congress because they were concerned that Hillary Clinton might not be tough enough on Wall Street. Indeed, Trump swore up and down for months that it was Clinton who’d do Wall Street’s bidding, while Americans could expect his administration to stand up to the finance industry and its lobbyists. Millions of voters actually believed he’d be “tough” on Wall Street.